The Risks of Dual Agency in NYC Real Estate: What Buyers Need to Know

Buying a home is one of the most significant financial decisions you’ll ever make, and having the right representation is key to ensuring a fair deal.

But what happens when your real estate agent—or their colleague—is also working with the seller?

This is a situation known as dual agency, and while it is legal in New York, it comes with potential conflicts of interest that buyers should be aware of.

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Understanding Dual Agency

In a typical transaction, a buyer’s agent is responsible for securing the best deal for their client, while the seller’s agent works to get the highest price and best terms for the seller. However, in a dual agency arrangement, one brokerage—or even the same agent—represents both parties. This can create a murky situation where neither side is receiving full, undivided loyalty.

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New York law requires agents to disclose when they are acting as dual agents or when members of the same firm are representing both sides of a deal. Buyers and sellers must consent to this arrangement in writing. However, even with disclosure, there are limitations. As Ruta Behrend, a real estate attorney, explains, “key fiduciary responsibilities, such as loyalty, confidentiality, and full disclosure, are necessarily divided.”

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What Happens When Your Agent Favors the Seller?

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If you find yourself in a situation where your agent seems to be bending to the seller’s interests, you have options. First, check whether your agent disclosed the dual agency relationship. If they failed to do so, they may be in violation of state law, which could lead to disciplinary action against the brokerage.

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If you’re uncomfortable with how negotiations are unfolding, consider:

• Speaking with the brokerage’s management – You may be able to switch to another agent within the firm who is not connected to the seller.
• Consulting with your attorney – Before terminating your agreement with your agent, have a lawyer review your contract to ensure you’re not breaching any terms.
• Finding independent representation – If the sale process allows, securing an agent who exclusively represents your interests can give you more confidence in the transaction.

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While dual agency is legal in New York, it often creates a situation where a buyer may not get the advocacy they expect. If you’re buying a home, be sure to ask your agent upfront about any potential conflicts and ensure you have someone fully dedicated to representing your best interests.

Real estate transactions are complex, and having an agent who prioritizes your needs can make all the difference in getting a fair deal.

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Disclaimer: This content is meant for informational purposes only and is not intended to be construed as financial, tax, legal, or insurance advice.

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